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• Accumulation Phase

Accumulation Phase

Accumulation phase within a Self Managed Super Fund primarily focuses on transferring of existing benefits (i.e. rollovers), contributions and managing fund investments, including formulating an investment strategy.  Information regarding contributions limits and rules under the Simplification of Superannuation reforms (Better Super) are outlined below:

Rollovers

A member’s super benefits can generally be rolled over or transferred within the super system with their consent.  If you accept a roll over of benefits from another super fund, that fund can ask you to show that your fund is a complying fund before processing your request.

Contributions

The two major categories of contributions are:

1 - Mandated employer contributions

These are contributions made by an employer under a law or an industrial agreement for the benefit of a fund member. They can include any of the following:

• super guarantee contributions
• super guarantee shortfall components
• award-related contributions
• some payments from the superannuation holding accounts (SHA) special account.

You can accept mandated employer contributions for members at any time. This means you may accept mandated employer contributions for a person regardless of the age of the person or the number of hours they are working at that time.

2 - Non-mandated contributions

These include voluntary super contributions such as the following:

• contributions made by employers over and above their Superannuation Guarantee (Administration) Act 1992or award obligations
• personal contributions made by employees
• personal contributions made by self-employed people
• other personal contributions and spouse contributions.

You can only accept non-mandated contributions in the following circumstances:

• For members under 65 years of age, you can accept all types of contributions (within certain limits). However, you can only accept member contributions if the member’s tax file number (TFN) has been quoted.
• For members aged 65 but less than 70, you may accept non-mandated contributions where
  • the member is gainfully employed on at least a part-time basis
  • the member has quoted their TFN.
• For members aged 70 but less than 75, you may accept non-mandated contributions where
  • the member is gainfully employed on at least a part time basis
  • the member has quoted their TFN, but you can only accept non-mandated employer contributions and member contributions made by the member
  • In both cases, the contribution needs to be received on or before the day that is 28 days after the end of the month that the members turns 75.
• For members 75 and over, you can’t accept any non-mandated contributions.

Fund-capped contributions

Non-concessional contributions are currently capped at $150,000 annually or $450,000 over a three year period. The caps are indexed annually. You can’t accept any fund-capped contributions in a financial year that exceed the following:

• For members aged 64 or less on 1 July of the financial year, three times the non-concessional contributions cap, which is $450,000 for the 2009–10 financial year.
• For members aged 65 but less than 75 on 1 July of the financial year, the non-concessional contributions cap, which is $150,000 for the 2009–10 financial year.

Fund-capped contributions are member contributions, other than any of the following:

• a contribution that your member advises they intend to claim an income tax deduction for
• a contribution from a structured settlement or personal injury payment. The member, or a legal personal representative should have notified you before indicating they would make such a contribution
• a contribution that is covered by a choice to treat it as a contribution for a capital gains tax (CGT) small business concession. The member should have notified you of their choice before making the contribution
• a super guarantee charge or SHA special account payment from us
• a super co-contribution
• a contribution that is a directed termination payment

Eligible spouse contributions

You can accept eligible spouse contributions for a member that is made by their spouse at any time if that member is under the age of 65.

If your member is aged between 65 and 70, eligible spouse contributions made for the member can be accepted only if that member is at least gainfully employed on a part-time basis. If your member is 70 or over, you can’t accept eligible spouse contributions for them.

There is no age limit or employment test for the person making the contribution.

Super co-contributions

We work out eligibility for the super co-contribution based on information from the Self managed superannuation fund annual return (SMSF annual return). Your members could be eligible for the super co-contribution if the following applies:

• your member is an employee or is self-employed and makes personal super contributions
• 10% or more of your member’s total income (assessable income plus reportable fringe benefits) for the financial year is from employment activities or activities from carrying on a business
• your member’s total income less any business expenses is less than the higher threshold (the higher threshold in the 2008–09 financial year is $60,342 and is indexed each financial year).

Members who are overseas

Your SMSF needs to meet the definition of an ‘Australian super fund’ as outlined in the super laws. Part of that definition requires your SMSF to be a resident super fund.

It is important for you to review your management and contribution arrangements before you or any member of your fund leaves Australia. This is required to ensure your SMSF continues to be a complying fund.

If you or any of the members of your SMSF are planning to travel outside Australia, you’ll need to know current rules around the definition of an Australian super fund to make sure your SMSF maintains its complying status.

In specie contributions

In specie contributions are contributions to your fund in the form of an asset, rather than money or cash.

Generally, you can’t intentionally acquire assets (including in specie contributions) from related parties of your fund. However, there are some exceptions to this rule, such as listed securities and business real property acquired at market value.

Is your fund healthy?  Contact us to undertake a compliance review on your SMSF.